Bridging the Gap between ‘Joe Sixpack’ and ‘Bill Gates’: On the Efficiency of Institutions for Redistribution

All democracies have implemented institutions that redistribute income from the rich to the poor. Economists tend to have strong views on how this redistribution should be organized, based on the two theorems of welfare economics. However, these views are mostly neglected. I argue that the reason for this neglect is likely to be that these institutions are constrained Pareto-efficient after a century of experimentation. If not, some political bargaining would lead to the implementation of the Pareto-improvement. Hence, economists should concentrate on an explanation of the constrained efficiency of existing institutions instead of on the design of drawing table grand reforms. This approach is applied to three institutions frequently observed in reality: minimum wages, education subsidies, and unemployment insurance. We show that these institutions for redistribution are likely to be constrained efficient. We analyze the impact of the constitutional environment on the implementation of efficient redistribution. Finally, we evaluate the causes for the observed cross-country variation in redistribution.     

On forecasting the relations between the People’s Republic of China and the United States

The article discusses the prospects of relations between China and the United States compared to the relations that have taken place between the superpowers of the United States and the Soviet Union. A comparison of relations between the two pairs of superpowers is made in the article based on the following parameters: the interaction of the superpowers in economic and financial sectors, the struggle for the world’s mineral resources, relations in the strategic nuclear sphere, naval rivalry, relationship in the land theaters, and conflicts in cyberspace.     

The relationship between the monetary regime and output volatility: a multivariate GARCH-M model of the Japanese experience, 1919–1996

In this paper we tried to determine whether or not adherence to a floating exchange rate regime helped the Japanese economy to absorb shocks which originated from domestic and foreign sources based on the Japanese experience from the interwar to the post Bretton Woods floating exchange rate period. Using a multivariate GARCH-M model, we analyzed the relation of exchange rate volatility and output volatility directly. The results imply that the floating exchange rate regime has helped the Japanese economy to insulate itself from foreign shocks. The estimated coefficient which represents the response to the foreign shocks decreases and the decrease is significant in the floating exchange rate regime.     

Intoxicants and the invention of ‘consumption’

In 1600 the word ‘consumption’ was a term of medical pathology describing the ‘wasting, petrification of things’. By 1700 it was also a term of economic discourse: ‘In commodities, the value rises as its quantity is less and vent greater, which depends upon it being preferred in its consumption’. The article traces the emergence of this key category of economic analysis to debates over the economy in the 1620s and subsequent disputes over the excise tax, showing how ‘consumption’ was an early term in the developing lexicon of political economy. In so doing the article demonstrates the important role of ‘intoxicants’—that is, addictive and intoxicating commodities like alcohols and tobaccos—in shaping these early meanings and uses of ‘consumption’. It outlines the discursive importance of intoxicants, both as the foci for discussions of ‘superfluous’ and ‘necessary’ consumption and the target of legislation on consumption. It argues that while these discussions had an ideological dimension, or dimensions, they were also responses to material increases in the volume and diversity of intoxicants in early seventeenth-century England. By way of conclusion the article suggests the significance of the Low Countries as a point of reference for English writers, as well as a more capacious and semantically sensitive approach to changes in early modern consumption practices.     

On the (nonlinear) relationship between exchange rate uncertainty and trade — An investigation of US trade figures in the group of seven

In this paper bilateral models formalizing monthly growth of US imports and exports are employed to investigate the potential of nonlinear relationships linking exchange rate uncertainty and trade growth. Parametric linear and nonlinear as well as semiparametric time series models are evaluated in terms of fitting and ex ante forecasting. The overall impact of exchange rate variations on trade growth is found to be weak. In periods of large exchange rate variations, trade growth forecasts gain from conditioning on volatility. Empirical results support the view that the relationship of interest might be non-linear and, moreover, lacks homogeneity across countries and imports vs. exports. JEL no. C14, C22, F31, F41     

‘Los von London’: A comparative,empirical analysis of German and British global foreign banking and trade development, 1881–1913

The role of finance in the development of trade draws increasing attention from economists and economic historians. Yet empirical studies, especially from an historical perspective, continue to be scarce. This study analyses the role of German and British foreign banks in the internationalisation of trade during the first globalisation. It creates a novel data set on the bilateral trade of Germany and Great Britain with the rest of the world and the number and geographical distribution of German and British foreign banks between 1881 and 1913. Using an augmented gravity model of trade, the article shows that banks had a significant positive impact on exports and imports and that this effect was even more pronounced in case of German banks and trade. Moreover, the effect of German banks on trade is the highest in the years closer to bank entry, supporting the idea of German banks being initiators of trade. In contrast, the effect of British banks seems constant over time.     

Measuring the relative development and integration of EU countries’ capital markets using composite indicators and cluster analysis

Review of World Economics - The paper proposes a set of metrics and a methodology to measure the progress that European Union Member States are making towards the development and integration of...     

Local economic development in Ghana: From the ‘lost decades’ to a policy ‘maturing’ stage

Analysis and studies of local economic development (LED) tend to be under the rubric of case studies to the neglect of their historical context and the role of international development agencies. This article attempts to fill this gap by focusing on the experiences of Ghana. Adopting a systematic review of the policy documents and existing literature, it was found that, despite its significance, LED was not the priority of the governments of pre and post immediate independence era. In the fourth republic of Ghana, LED gained prominence in the various policy documents but this appears to be rhetoric and camouflage because they have not seen real implementation. However, international development agencies have played a significant role in initiating, funding and implementing specific LED activities in the various districts in Ghana. Overall, LED in Ghana has crawled from the ‘lost decades’ to a policy ‘maturing stage’.     

Using Giddens's theory of ‘structuration’ and Freirean philosophy to understand participation in the Alexandra Renewal Project

The main critique raised against participatory approaches to development is that they do not adequately address issues of politics and power. This paper contributes to the theory and practice of participation by introducing a framework drawn from Freirean philosophy and applying Giddens's theory of ‘structuration’ to that philosophy. Specifically, it focuses on the relocation of people from the banks of the Jukskei River as part of the Alexandra Renewal Project. It draws on the author's interviews with key local-level stakeholders, including government leaders, managers of the Alexandra Renewal Project, and those directly involved with facilitating the participation of intended beneficiaries in Alexandra. The study uses Giddens's theory to conclude that although participatory processes may be intended to (in Freire's words) domesticate, the domesticating or exclusionary nature of the intervention provides the basis upon which people liberate themselves.     

Estimation of a country’s economic development on the basis of the global competitiveness index

This article investigates the competitiveness of macroeconomic objects at different hierarchical levels. Analysis of a country’s competitiveness is presented on the basis of the global competitive index. The author offers an integral indicator of a branch of industry’s competitiveness potential according to seven main factors that permit numerical estimation.     

Processes and mechanisms of the long-term development of Russia’s construction materials complex

The paper considers the development mechanisms of the Russian construction materials complex and their role in its future. The means of efficient accumulation of capital are discussed within the inertial and constructive options of economic growth. Special attention is paid to problems of import substitution and added value of materials, as well as methods of their solution in the changing macroeconomic environment.     

On the Development of Russia’s Information and Communication Technologies Ecosystem

A quantitative model of Russia’s information and communication technologies (ICT) ecosystem has been proposed that describes the main relationships between its participants, as well as the impact of environmental factors on the functioning of the ICT ecosystem. Based on the model, we have assessed the long-term (until 2030) potential for the development of Russia’s ICT sector in the case of the state’s active and stimulating strategy and the formation of an advanced system of institutions. We have also evaluated the contribution of the ICT sector to the macroeconomic dynamics while implementing the target scenario.     

Transformation of the reproductive mechanism of the world economy and prospects for Russia’s socioeconomic development

The article substantiates the author??s view on the basic principles underlying the reproductive mechanism of the global economy. It shows the degree of specificity and consistency of the reproductive mechanism of the Russian economy in comparison with the global model. An evaluation is performed of the opportunities and conditions for a transition to Russia??s accelerated economic development and modernization of its productive apparatus.     

Church building and the economy during Europe’s ‘Age of the Cathedrals’, 700–1500 CE

In a Christian age, churches reflected societies’ material resources as well as their religious and cultural aspirations. Data on the construction history of 1,695 major churches in present-day Italy, France, Switzerland, Germany, the Low Countries, and Great Britain are used to infer the trend and pattern of economic activity between 700 and 1500 CE. Across this long and economically formative, but relatively poorly documented era, they are among the few artefacts that can be quantified consistently. This is the first attempt to resolve the methodological challenges entailed in systematically gathering, organising and analysing this information at a supra-national scale. The results imply a transformation in Western Europe from the end of the 10th century with steeply gathering momentum, culminating in the great boom of the 12th century. Fresh light is also shed on the long contraction that set in from the late-13th century. Rising agricultural production and feudal surplus extraction were important drivers early on, but over time construction activity was most vigorous at locations enjoying commercial and especially maritime advantages. By the 15th century, as the impetus of construction was faltering almost everywhere, it was in commercially resilient Brabant and the Netherlands that church building remained most buoyant.     

Typological analysis of Russia’s border regions by the level of socioeconomic development (case study of the Republic of Tuva)

This article analyzes the development specifics of Russian border regions in two aspects: their place in the general typology of Russian regions in terms of socioeconomic development and their typology in terms of development in the aspect of border regions.     

Women and empowerment through the ‘economy of affection’ in KwaZulu‐Natal: Its significance for sustainable development

This article is an attempt to demonstrate how, in the absence of infrastructural requirements for development in the rural areas, the interpersonal relationships of women articulated through their households, kinship networks and community structures serve as indispensable mechanisms for their survival. These mechanisms are seen as part of an indigenous socio‐economic framework that is referred to here as the ‘economy of affection’. This framework is presented, through ethnographic data, as a means of facilitating moral, social and economic support among the indigent rural people in KwaZulu‐Natal. Taking cognisance of local organisational forms and resources is the best possible way to reconstruct South Africa's vast hinterland against the background of a history of development patterns, where rhetoric has played a more important role than actual substantive contributions to development of the rural poor, and where capital investments, technology and expertise of a post‐industrial nature are unlikely to spread.     

Trade creation,trade diversion,and the general equilibrium effects of regional trade agreements: a study of the European Community–Turkey customs union

This paper presents an industry-level analysis of trade flows in order to estimate the trade effects of Turkey’s customs union with the European Community (EC). The paper is able to distinguish between trade creation and trade diversion by employing tariff data on each good to measure the impact of not only the tariff level but also the difference between tariffs applied to imports from Europe and the most-favored nation tariffs applied to imports from other non-preferential trading partners. The paper estimates the general equilibrium effects of the customs union in addition to the effects of eliminating tariffs on the EC’s exports to Turkey. It concludes that the customs union has generated more than twice as much trade creation as trade diversion but that the overall impact of the customs union has been relatively small.